intelligence and all of this, he should have a lot to talk about about history. i wish you could tell us why -- you can go on youtube and you have more disclosure, more accountability, and a lot more knowledge in any of the public outcries, radio, whatever. what i would like to ask -- do you think there was a conspiracy with john f. kennedy and the corruption between j edgar hoover and a cia cabinet member going on at the same time. president kennedy was trying to break down the secret organization and all the secrecy going on in the background.

he was set up -- the next thing you know, the man was assassinated. it becomes history. guest: it may be that you have been watching oliver stone's movie, too often. my personal opinion is there was no conspiracy. that is not a popular opinion with some people. i have looked into it. i've read the warren commission. i've read books on it. that is just my personal opinion. we may never know the truth, but on the face of it, it appears it is what the majority of people think that there was a lone assassin. host: back to your piece in the "smithsonian." how did you come across this story? guest: i cannot talk about that. [laughter]

a source in the intelligence business whispered to me about it. i was able to confirm all the details. i know a lot of people who are in that business or who had retired from that business. they know me. they trust my ability to try to get the facts unvarnished to try to write a very straight story. i do not have an ax to grind, i just want to tell what happened. because of that is my approach, i think that is why people talk to me. host: how long did it take people from discovering this to put it into print? guest: it seems it took the better part of the year to confirm it, the research, the editing.

my editor worked very closely with me. there was a whole process involved. first you get the story, and then you have to get into print. host: might this be another book? guest: you never know, i don't think so. i have written 14. host: his report deals with the first ever mole hunt within the fbi. "mole hunt" by david wise. "when the fbi spent decades hunting for a soviet spy on its staff." caller: i have a couple of comments and maybe a question.

i enlisted in the marine corps as a security guard. during the time i was in the marine corps, i ran into a program where we had put people in foreign countries, czechoslovakia, hungary, poland, bulgaria, and they spoke the language and they were living as citizens of those countries and collecting intelligence on us. i'm not positive on the code name. i was going to apply for it. that has been going on for years. we have been collecting intelligence from our embassies and on top of everybody else's embassies, collecting some type of intelligence. we have a staff of snoops and we

had -- people. i'm not sure the title. again form come debriefings all the time. they were very informative. the other thing -- we have been doing this -- we had the ability to listen when i was with the agency. i went with the agency in 1973, but we have the ability to listen through walls, windows, curtains. the russians did it to us, that is why we had to send cvs into the moscow embassy. now these politicians are saying

things like this is outrageous. merkel, blah, blah. host: let me leave it there. what you make of his comments? guest: very interesting comments. this ties in with what i said earlier. it is difficult for the intelligence he -- the intelligence agency to operate in moscow because of the kgb, now the fsb. i was not aware that we put illegal's into the eastern lock in russia. i think that would be hard to do. perhaps you are correct. i do not know. host: grant, washington, d.c., independent caller.

guest: given his experience, behind the chinese and behind the soviets, you have israeli spies who are involved in nuclear spying on the united states. you have jonathan pollard. the fbi will not release a single file of the investigations of these israeli nuclear spies who have targeted the united states. it seems there is a pattern of not allowing americans to review those investigations to see whether they were bona fide. there is a story about israel that goes on and on. host: where was that? where did you find that? caller: that was published on information clearinghouse. it is an online blog news.

it is for unpopular news. guest: i had not heard that. in the present climate where there is sensitivity about spying on allies or vice versa, it would be understandable why not much is being said. i do not know for which you are saying is accurate. i have not seen that story. there's a lot of information on the internet, not all of it is accurate. this may be, but i don't know. host: what about the statement that the president was not aware that the nsa was tapping the phone of government leaders? guest: they said the president was generally aware of what the nsa was doing, but they have not specifically said he has known about -- that he knew about merkel or other allied leaders. it is probably true. critics will say, why didn't he

know? you cannot win. it is a catch-22. they never expected to have snowden's revelations all over the place. it means there is almost an end to secrecy. first you had the wiki leaks, private manning, and now you have edward snowden who has caused and international -- an international uproar. it makes you wonder whether the government can preserve some of the secrets because there are young people who have other ideas and they are willing to take the risk of putting them out. it is an interesting and relatively new development that makes it hard. some secrets should be kept, but it is a question of degree. it looks as though the nsa was doing too much. they have to do some things, obviously. there has to be a balance between security and freedom.

we could live in a police state where the government knew everything. there has to be a balance between what the government needs to do and our own freedom and civil liberties and rights. they happen to be guaranteed in a thing called the constitution of the united states. host: is glenn greenwald a journalist or an activist? guest: you have to ask him, i think he is a little bit of both. host: why do you say that? guest: he made no secret that he has a point of view. that means he is an activist. he was also writing for "the guardian." that is a liberal, leftish paper which has done some very good work. it creates more transparency on some of these issues. i believe he is leaving there or has left to work on a new

venture with the gentleman who started ebay. host: brian, wilmington, north carolina, independent caller. caller: i have been listening to what you have been saying about you are not sure if other countries have been doing the same sleeper agent thing. is it more practical to have these boots on the ground? i feel it is more contain information, more relevant and practical to have roots on the ground. it is more expansive. it is very broad when you do the wiretapping. which is more relevant for the spy world? guest: it is tempting to think illegals are the better way to go. i do not believe in the election -- collection of the metadata in

this country. we have other mechanisms to wiretap you go through the courts. the problem with illegals -- they did not get very much. there were 10 of them here and that was an unusual number. usually the russians would have one or two, but 10 is a big number. you think they must have stolen all kinds of stuff, but there is no evidence they did. living out in montclair, new jersey, where there are not too many national security secrets. i do not think there a lot of secrets. it is tempting to think illegals are the solution. there is no evidence in this case that they came up with anything worth talking about. host: how you feel about

outsourcing of fbi, nsa, and homeland security? would we be better serve the security services were in house? guest: i think the jury is out. contractors are hired because they do not have enough people to do some of this work in- house. we have seen that the company that was doing the vetting of these contractors was overburdened. one woman in los angeles had to cover a people a day -- eight people a day. if you have driven around los angeles, that is not easy to do. the people doing the vetting, obviously in the case of snowden, he slipped through the cracks. when you use contractors, there may be a tendency to use contractors to that the contractors. to vet the contractors.

it's a tempting idea to get outside people. i am not sure it's working very well. host: we have a couple of minutes left. he wrote exclusive story for "smithsonian." a soviet spy had tipped off the fbi agency and set off with david weiss calls the most self- destructive investigation in fbi history. barry, massachusetts. hi, barry. caller: with the thousands of witnesses, architects, engineers, explosive experts that have come out providing evidence that the 9/11 commission is more fiction than fact, why haven't the public figures come out and demanded a new investigation because this is not opinion. it is physics. it is scientific fact that we are being lied to. guest: have you looked -- host: have you looked into the 9/11

attacks? guest: i have. there are some flaws and it which i have written about. i think on the whole, considering the time frame and the fact that it was close to the event, they did a fairly good job. no one has convinced me what the lies are. there was poor coordination between the cia and fbi. the commission talks about that. perhaps there is more to be said about it. host: you talk about when you first got the tip, it took you over a year to confirm the details. what surprised you along the way? guest: what surprised me was the

willingness of so many former fbi officers, officials, agents to talk to me about it. many of these people i knew and knew well. i was not surprised that they would trust me, but there were some that i made cold calls. i said i'm doing this, some of them have heard about my books or read my books. others probably had not. i think it was the passage of time and the feeling that hey, it is ok to talk about this. it goes back to 1962. into the 1970's and 1980's. the willingness of people to talk to me to tell the story even though the bureau was not willing to talk about it at all or to admit there was such a case. host: you call it a self- destructive investigation, why?

guest: i did not write that headline, but i would agree with it. there were a lot of people in the new york office where the mole hunt was centered. they felt they were being distracted from their job of intelligence gathering. host: it is the october edition of the smithsonian magazine. thank you very much for your time. look ahead to the 2014 midterm elections with charlie cook. talk about the next week's election for governor in virginia and new jersey. after that, a bloomberg businessweek looks at how the stock market is performed under president obama's tenure compared to ronald reagan. latest in syria

including efforts by the international community to locate and destroy the chemical weapons. calls --inst plus your those against -- against -- guests plus your calls. in 1963, the communists did something they had never done before. a stained and -- they stayed and fought. pagedy seized on the front and said what is going on i thought we were winning? over the course of the next few months into february, he is going to hear from white house officials in the state department and military officials. really contradictory evidence about of the military campaign. 50thvember 22 is the

anniversary of president kennedy's assassination. a discussion about his recordings and bolts on vietnam. at 7:30 p.m. part of america history tv on c-span 3. >> i never expected to write an entire book until i was diagnosed relatively young. i was diagnosed at 36. i was astonished at how different i thought it was. how different it was going through treatment than what i had heard about cancer and what i expected it to be. i sort of expected it -- to join a well oiled machine in which care was not guaranteed but people knew about my particular cancer and i will give followed. what i found was something really, really different. >> a cancer survivor explores the economic impact on american

society. on afterwords. part of book tv on c-span. address, weekly president obama calls on congress to pass a budget. indiana senator dan coates delivered the republican address. he focuses on the health care law. >> hi, everybody. on thursday i addressed a conference for business leaders around the world. my pitch was simple. choose america. invest in america. create jobs in america. it speaks to my top priority as president, growing our economy, creating good jobs, strengthening security and opportunity for the middle class. over the past three and a half years, our businesses have created over 7.5 million new jobs. this week, the treasury confirmed that since i took office we have cut our deficit by more than half.

but we have more work to do. we need to grow and create more good jobs faster. that is my driving focus, and i will go anywhere and do anything to make it happen. that has to be washington's driving focus as well. i know what you often hear out of washington can sadly charley brown's teacher, a jumble of unfocused noise out of touch with the things you care about. today i want to cut through that noise and talk plainly about what we should do right now to keep growing this economy and creating new jobs. it begins by ending what has done more than anything else to undermine our economy over the past few years, the constant cycle of manufactured crises and self-inflicted wounds. i was glad to hear the republican leaders in the senate say they will not pursue and other government shutdown or threaten another default on our debt. we should not be injuring ourselves every few months. we should be investing in ourselves. one way to do that is through the budget congress starts working on this week.

budgets can be a boring topic, especially on a weekend, but they can also be revealing. they expose what our priorities are as a country. for everybody to see. think about it -- we can keep wasteful corporate tax giveaways that working folks don't get, or we can close those loopholes and use that money to pay for things that actually create jobs. we could keep harmful cuts to education programs, or we could give more kids a head start. hire more teachers in math and science and help more kids afford a college education. we can keep doling out corporate welfare, or we can invest in renewable energy that creates jobs and lowers carbon pollution. priorities, choices, that is what this is about. and the stakes for the middle class couldn't be higher. if we don't pick the right priorities now, make the right choices now, we could hinder growth and opportunity for decades and leave our children with something less.

that includes the obsession with cutting just for the sake of cutting. that doesn't help our economy grow. it will hold us back. remember, our deficits are getting smaller, not bigger. on my watch their falling at the fastest pace in 60 years. that gives us room to fix our long-term debt problems without sticking it to young people or undermining our bedrock retirement and health security programs or cutting basic research that helps us grow. here is the bottom line. congress should pass a budget that cut things we don't need and closes wasteful tax loopholes that don't help create jobs so that we can free up resources for the things that actually do create jobs and growth. building new roads, building new bridges and schools and airports. that creates jobs. educating our kids and our workers for a global economy. that helps us grow. investing in science and technology, research that keeps

our businesses and military on the cutting edge. that is vital for our economic future. the question is in between growth and fiscal responsibility. we need both. the question can't be how much more we can cut. it has got to be how many more jobs we can create. how money more kids can we educate? how much more shared prosperity can we generate? because in america, our economy does not grow from the top down. it grows from the middle class out. as long as i'm president, and national mission will remain building in america where everyone belongs, and everyone who works hard has a chance to get ahead. thanks, everybody, and have a great weekend. >> i am dan coates, and i have the honor of representing the people of indiana in the u.s. senate. it has been one month since the launch of the health care law's website, and many americans across the country still cannot enroll. the white house and congressional democrats have insisted time and again that the

obamacare insurance exchanges would be tested, secure, and ready to go on october 1. the president even told the american public that signing up online would be as easy as a few simple keystrokes. perhaps the president has not tried logging onto the website himself, because he and his political appointees are not required to join obamacare. let me repeat that -- the president and his team are not required to join obamacare. unfortunately, the rest of the country doesn't have that luxury. too many americans still cannot even access the online exchanges, and for the few that have, their experience is sticker shock. the president told us obamacare is more than a website. i agree. it is more than just a website, and the problems run far deeper than a few technological glitches. when middle-class families are getting hit with massive premium

increases and outrageous deductibles, it is more than just a website. when hard-working americans are seeing their hours cut and paychecks shrink, it is more than just a website. when more people are losing their plans that are able to enroll in new ones, it is more than just a website. take rebecca from muncie, indiana. she is one of the many americans who received a letter saying her current individual health care plan will be canceled due to obamacare. she discovered the premiums in the government-approved plans are double and triple what she is paying now. she wants to know why she can't keep her current plan, as the president promised. there are stories like rebecca's all across the country. and the administration knew this would happen. this week, the public learned that for at least the past three years the obama administration

has known that millions of americans will not be able to keep their health care plans. but the president has continued to promise repeatedly that if you like your health care plan, you will be able to keep your health care plan, period. tell that to over 300,000 people in florida who have received cancellation notices, or the nearly one million californians that may see their health care insurance plans disappear. tell that to the tens of thousands of hoosiers in my state that will see similar notices arriving in their mailboxes. this is about more than just a website. it will take more than an infomercial from the president to fix this. the failure of obamacare's launch is just the tip of the iceberg, and unless we act americans will be stuck on board the titanic. this is why republicans are going to keep fighting to protect consumers from the

consequences of the health care law. despite all the problems, warning signs, and broken promises, the president and senate democrats have decided to use it with obamacare and continue to stick the american people with fines if they don't sign up. in september, i introduced a bill to delay the obamacare mandate for a year. what would my bill accomplish? it is all about fairness. the administration said they would delay penalties for employers who don't provide coverage to workers. however, the white house refuses to delay the individual mandate. as a result, families will need to demonstrate they have washington-approved insurance or face tax penalties. this simply isn't fair. delaying both mandates would provide all americans with the same relief given to businesses. if obamacare isn't working as promised, why should americans

be forced to pay fine if they don't sign up? second, it is about giving americans control over the future of their health care. by delaying the mandate until 2015, americans will be able to weigh in on the health care law's fate. until recently, many have not felt the impact obamacare would have on their everyday lives. but as paychecks fall and individuals face tax penalties in the coming months, people are rightly outraged, and they want their voices heard. americans deserve the opportunity to decide whether they want to keep obamacare or replace it with real solutions, solutions that bring down the cost of care and protect the vulnerable. the house is already taken the first step in passing similar legislation offered by my indiana colleague to delay mandates. 22 house democrats supported it.

several senate democrats have reason we come out in support of delaying parts of the president's health care bill as well. there is bipartisan agreement that this law is not working. fixing a website will not fix the damage that has already been done. and the pain will continue to see. americans deserve access to affordable, quality health care. so let's start over and do this right for the american people. thank you for listening. >> this week cap links ability us was inthleen sebeli front of the congress. she talked about the website's reported problems and how they are being fix and individuals receiving cancellation notices from their insurance providers. they here and you can see tomorrow at 10:35 a.m. tomorrow

on c-span. >> i'm surrounded by a few of the items. she often worked with one of her favorite designers for her suits and they were outfits. this is out house that she were to the formal opening where she and i met queen elizabeth. another dress is the eisenhower -- a printed cotton fabric with many of the houses they lived in during their marriage. it includes the five star symbol for the five-star general i'd eisenhower. these are examples of her dangerousness. she was very fond of the color pink and wore it. -- and these are examples of her designers. here are two examples of her favorite little black dress. know said she would never

dress like an old lady. this shows her love of bright colors and wild fabrics. eisenhower onmrs. c-span and c-span 3 and c-span radio. next they hearing on the federal housing administration. some of the business summit. and at 7:00 a.m., your calls and the latest news on "washington journal." the federalal from housing administration testifies about the agency's finances and clued a transfer of funds from the treasury department of the $1.7 billion. edwards held by the house financial services committee. it is a little less than three hours. -- it was held by the house

financial services committee. >> the committee will come to order. recessright to declare at any time. the authorized to declare recess at any time. bill payer. tax i reckon eyes myself for five minutes to give an opening statement. -- i recognize myself for five minutes to give an opening statement. the topic of the declining fiscal health of the federal housing administration and we heard from witnesses that fha was a normal warnings about using its existing tools appropriately and failing to minimize losses. today our witnesses have been proven correct. the fha is indeed a broke and bail out a broke. 29 days ago, they became the recipient of the washington bailout funded and by hard- working taxpayers. to the tune of $1.7 billion.

on february 13 when our witness commissioner galante came before us to talk about the state of a leachate, she said they were making changes to accelerate the fund recovery. regrettably, it seems that only accelerated our national bankruptcy by accelerating the national debt clock which can be seen on the monitors to both my left and right. last stoodr galante before us it was 16.5 chilean dollars and 18 months later it stands at a staggering 17.3 trillion dollars and counting. -- $16.5 trillion and 18 months later it stands at a staggering 17.3 trillion dollars and counting. our national debt is the greatest facing our nation

today. the former chairman has said that is the greatest threat to our national security is the national debt. erskine bowles have said it is like cancer and it will destroy this country from within. congressionalh budget office warned of our federal debt is unsustainable. yet a number of my democratic colleagues have asked to have the debt clock are removed from sight. reflecting a see no evil attitude when in fact president obama has said "do not pertain at america is going bankrupt." that similar doubt words were spoken in greece and detroit. the budget office reported that fha has misstated its projected recovery specifically the cbo has said mortgages and short of the past decade have had a net cost of $50 billion even though

the initial estimate suggested 45 billion dollars in profits. that is a remarkable $60 billion swing in the wrong direction. -- thatrosie situation regrettably has a history of such. whether it was secretary stevens are telling us that every change financial troubles would last a short. time or theeriod of prospects for the future are good. or commissioner reporting that reforms and enforcement efforts underway "position fha well for the future." these assurances that bring a little bit ring a little bit hollow. a taxpayer-funded bailout reinforces everything that many have said about fha for some time. ands high risk to taxpayers

to our economy. the government accountability office has underscored those points in february when it added the fha to programs considered high risk due to their vulnerability to fraud waste and abuse and mismanagement and the need for transformation. bailout alsoion reinforces the need for the protecting of american taxpayers and, honors act. it will achieve needed objectives for the federal housing administration and put fha on sound financial footing and keep it there. it defined their mission to ensure the agency is serving first-time homebuyers a low to moderate borrowers. shifts risk away from taxpayers and into the private sector by reducing fha's footprint and make sure that and she is complement and not competing. it ensures it runs as single-

family fund according to the basic tenets of mortgage insurance. the insurance of the 30 year x mortgage and attained fha role. the american people want to and these distractive cycles of a boom, s, and bailout -- bust, and bailout. fha exacerbates. tohas gone from backstopping supplanting the market. the time for fha to reform is now. we can wait no longer. the chair recognizes the gentleman from georgia for two minutes. >> thank you very much. >> i do not think your microphone is on.

>> let me thank you are you coming down to atlanta to our event. from being foreclosed upon. i appreciate you coming down and being with us at that time. first of all, this not a bailout. for us tois very easy try to use that kind of a language. this is a required, mandatory appropriation of nearly $1.7 billion and appropriations from the nine states treasury that is required -- from the united states treasury that is required and needed. to the chairman of's point, -- chairman apostle point, -- point, the act requires at the end of every fiscal year which includes the fha must have sufficient oferves to cover 100%

anticipated future losses. the fha's rogue worms -- programs are subject to the federal reform act. they can take advantage of permit and definite authority to cover increases in cost for outstanding loans and loan guarantees. that is all this is. this authority allows the fha access to u.s. treasury funds without congressional approval for any funds needed to balance its books. that is what this is. that is what is in the law. it is no kind of bailout. importantk it is very that we be honest with the american people so they know this is codified in the act of 1990.

>> the chair recognizes the gentleman from texas. >> thank you, mr. chairman and for holding this hearing. we have several points. every body erect a nice is that fha has played a viable role -- everybody has recognized the fha has played a viable role in first-time ownership. when these young couples urges of these homes and raise up their families -- purchase home and raise of their families, that is why does important we have a healthy fha. they play a vital role. the problem is and is not on sound financial footing and that jeopardizes its ability to provide this first-time home buyer or low income financing. you are going to hear today is that fha is not broke. that is not the case. have a negative capital ratio for the they're supposed to have

2%. 4%.many have to have they have a negative net worth of 60 point $3 billion. you're going to give they have $48 billion in the bank. -- $60.3 billion. they do not have enough to cover all of their liabilities. we need to pass the past act. it make sure we have a strong fha for the future. so it can help these families and make sure that taxpayers do not have to underwrite these mortgages into the future and put them on sound footing. it gets in the fha back to its original core mission. we haveportant that this discussion. we need to know exactly where fha is because i do not think anybody knows. us things were fine and getting better. we have people telling us the

same thing about freddie and fannie that things were fine and great. the turned out to not to be case. what did administration has done is miss the mark on projection after projection. with this, i yield back. >> the chair recognizes the judgment from connecticut for two minutes. -- the gentleman from connecticut for two minutes. thehank you and i welcome witness to talk about an important question. a couple of observations. i sit down and listen to the majority talked so quietly about fiscal responsibility and so much concern from the debt. most of them voted to default upon questioning whether we should take any responsibility of prudence, and from those who voted onto the falls on the united states or debt with perhaps a grain of salt.

to move on to the topic of this hearing. it is important that those who are watching this understand that when of the word of bailout is the use it is not being used terribly accurate. it is not counted entry. i am not saying it is a good thing. the fha like fannie mae and freddie mac is paying a price for the activities of the real estate industry and the government involvement in real before and006 and after that. they are staggering out to what was the most significant we have experienced as the 1930's. that they areking looking for $1.7 billion in capital. if you believe the market is destined to do another massive downturn, you should be concerned that will never be reversed. and generations of experience on what fha shows two things. this is not cash.

it is not cash going to merrill lynch or bank of america or any of the other financial institutions that receive a bailout in 2008. it is an accounting entry. a call fha sets we have on cash. an accounting entry if you look at the history has always been the opposite. as for most of his existence it has operated a surplus and funded important affordable housing programs. as we talk about a bailout, keep in mind it is not cash. thank you. >> the chair recognizes the gentleman from new jersey. >> thank you. herereciate you being today. i wish it was under happier circumstances. as dead we are here in the aftermath of what will be the first taxpayer -- instead we are

here in aftermath of what will be the first taxpayer bailout in 80 years. belier we were told it would about half the size of what it is going to be in fact. i am troubled about what it says aboutthe fha and angered forcing the american people once again to come and rescue another failed american bank housing agency. what is even more alarming is the fha's pattern of underestimating your losses. i can see two possible as will nation stop either they are really bad at assessing risk which is what your core mission is or for the years you knew what the real risk was a you are downplaying each time you came to congress. a stress test conducted earlier in the year, the fha tried to cover-up. the federal reserve estimated any severe economic downturn the

fha would not need a $1.7 billion but $100 billion and while we cannot predict it will happen or not it is clear that fha does pose an enormous liability to the taxpayers. one of the most important steps would be to refocus fha on his core mission of helping low to moderate income borrowers and we do that with the past -- path act. government guarantees do not make the market safer. to use the forbidden word of bailout, $1.7 billion. in some peoples mind, that is pocket change. areop obama this we supposed to believe it is the only bailout the fha -- on top of that, we are supposed to believe it is only bailout the fha will need. i yield back. >> the chair recognizes the ranking member for four minutes.

quick thank you. -- >> thank you. i am pleased you are before the committee today. i would like to applaud your work. which is provided an affordable pathway for hundreds of thousands of first-time and low, -- income americans. with when the private sector virtually left the market, the federal house administration stepped up and provided the liquidity that cap our struggling housing market afloat. that is the role of fha as it has been throughout the course of his nearly 80 year history. despite action taken in recent years, the severity of the financial crisis came to help of fha. recently fha announced a number of changes designed to shore up finances. fha has raised premiums on multiple occasions and strengthen down payment requirements and enhanced

underwriting and increased enforcement measures. lettersrecently issued for the home equity conversion program to have stabilized business which is accounted for the majority of fha's losses. as a result, fha last two books of business, 2011 through 2012 have been the strongest in the administration's history. the 2013 book is estimated to continue that trend. nevertheless of september 30, fha was required to take a mandatory appropriation of approximately $1.7 billion. although this one-time transfer of funds from the treasury is legally necessary thomas it is important to note that fha is far from bankrupt. in fact, it holds over $48 billion in cash on hand and to the agency continues to generate

revenue. this mandatory appropriation is only required because fha is bound by law to hold the revenue necessary to pay any potential claim over the next 30 years without taking into account new business. moreover, that capital used to determine whether a mandatory appropriation is required is completely outdated. based on assumptions about loan performance and recovery made december 2012. the number does not incorporate improvements or current economic factors. these significant changes are likely to have -- improve the underlying health. priceations of home depreciation has improved significantly and in conjunction with rising home prices, fha policy change have boosted recovery. hud as -- has implemented

measures including and more ingress of dust and more .ggressive pursuit to shore up higher interest rates are likely to reflect positively on the fund as his dissent borrowers prepay more slowly. -- pre-existing borrowers repay more slowly. it is not an up to date view of performance. cash position. above all we must drive to have a healthy, viable fha to facilitate home ownership wallace standing ready of another debt while standing ready of another financial crisis without i yield back. the chair recognizes the gentlelady from west virginia. >> thank you.

i want to thank our witness for being here today and thank you for your service in the housing industry. i am very concerned about the bailout of $1.7 billion. i've been on the housing committee for many years and d sat through testimony after testimony that said we would never reach this point. when we were dipping below the ratio.cent we were assured that with the house and the move -- mark improving -- market improving global would never need a bailout. yet here we are. move abe an accounting $1.7 billion in my book is $1.7 billion. if we were told this would never happen, that russian is how do we get there? -- the questions how did we get there?

we would've been here last year if we did not make a change. i yield back. >> the chair recognizes the gentlelady from ohio for two minutes. >> thank you. thank you for being here. let me join my other colleagues in thank you for all of the work you have done in this industry and i am looking forward to hearing your testimony and having the opportunity to pose a few questions. let me be very brief in my remarks as say certainly as you and our audience today can imagine there are two sides to every store. i have those the overemphasis on bailout today but what i have not heard is all of the good things that have happened through your industry in providing low and affordable and,. with the portfolio looks like today and those dollars that are

being taken from the treasury for the i've had in the absence of legal that is a legal way of expense of those dollars. what i was most impressed with as i looked through your testimony and i'm sure we're going to hear more about that today is wednesday the ultimate health of the portfolio is a function of the broader economic environment. we need to be reminded when the government shuts down the default on treasury is threatened and in the economy performs worse and in the mmif suffers. hopefully you will have the opportunity to tell the other side of the story and share with us the history and more importantly where we go from here. thank you and i yield back. >> we welcome testimony of carol galante, the commissioner of federal housing administration at department of housing and urban development.

she appeared before our committee on february 13 of this year. she needs no further introduction. without objection to her written statement will be made and part of the record. you are recognize. thank you for being here. >> chairman -- >> i do not think your microphone is on. >> can you hear me now? chairman, ranking member, thank you for the opportunity to testify about the insurance fund. first i want to be clear that while we would have preferred to avoid the mandatory appropriation these funds are not a bailout at a not a failure of the fha model. this account and transfer is a static assessment as part of the annual budget process and is based on september portfolio characteristics using fall assumptions.

this assessment determines the amount of reserves necessary to pay for up to 30 years of potential claims. today these assumptions are outdated as demonstrated by the dramatic improvement and portfolio performance and included a 15% drop in the liquid seas and a 91% drop in early payment defaults and production -- reduction -- 30% improvement in recovery rates. these improvements cannot be captured by the calculation and right now fha has $48 billion in liquid assets on hand. the housing market was crippled by the reckless purposes of private actors ultimately resulted in the worst recession in this nation has seen in over 70 years. the discussion we are having today would be very different if it were not for the series losses on the books from 2006 to early 2009. high has testified many times

about the clear and significant impact of those years on fha. especially down payments and -- they lacked the authority to make the changes necessary to prevent them. the program accounts for $15 billion in expert a lawsuit to the font according to the actuarial apart -- report. our capital reserve a would've by $3ap -- positive billion stopped throughout the crisis, we have played a dual role of assuring credit while countercyclical support to the market just as it was intended to do. since 2000 nine, this administration has taken aggressive steps to assure the soundness. we have raised premiums five times reversed the cancellation and tightened credit requirements.

these actions were made possible because of the support of congress. i would especially like to thank fitzpatrick for the work on the reversed mortgage stabilization act making us safer for borrowers and taxpayers. to be clear a while the changes cannot erase the adverse effects of the past or the considerable ,train the recession placed they are insurance that future books are much stronger. we are on the right track. new books of business continued to perform well. two weeks ago, the congressional budget office notice the profitability of the 2010-2012 or folio. in addition to focusing on ensuring strong new books, we have executed on our commitment to reduce losses on past books keeping families in their homes when possible while protecting the fund.

improvements to our loss mitigation waterfall and settlements with lenders and expanding use of our yellow programs areeo responsible for improvements. we estimate that improvement and recovery rates are worth no less than $5 billion. far exceeding the amount of the mandatory appropriation. the actions we have taken since the heat of the crisis have had the effect of reducing the footprint. no one is more concerned than i am a with ensuring fha continues on its trajectory to rebuilding our capital reserve. the future,sful in fha and needs of the right tools and you're so poor. -- and your support. it should terminate origination would allow us to better identify risk and avoid unnecessary losses. authority when the fund is at

risk to revise requirements of the mortgagee letters while rulemaking is underway will improve our responsibility -- our abilities. given at which a more control over resources such as the use of the scale or flexibility would also help.